The Ketchikan City Council kicked off its annual budget-review process this week with a special meeting on Monday night.
During that meeting, City Manager Karl Amylon told the council that the 2019 City of Ketchikan budget is a “status-quo” spending plan. The service levels are the same as this year, and staffing is largely unchanged. There are no tax increases, he said, and no fee hikes programmed in the draft spending plan.
The city’s general fund appropriations total about $27 million. The city has other funds designated for specific purposes, such as the approximately $7.5 million hospital sales tax fund.
Amylon said the proposed city budget does – again — show a deficit.
“On a positive note, the city typically does not spend all the appropriations for the general fund, so an actual deficit has failed to materialize,” he said.
But, Amylon said, the programmed deficit has been growing, and at some point not spending everything in the budget will no longer be enough to keep the city from drawing down reserves.
He said before that happens, the city should review its tax structure, fees and operating costs. Amylon notes that an update to the city’s compensation plan could make such a review even more critical, depending on whether the council decides to implement recommendations.
“While the issue of tax increases and charges for services can be deferred for the next 12 months, It’s my belief it may be more prudent for the council to begin considering enacting smaller adjustments now, rather than waiting and having to confront more significant increases down the road,” he said.
City Mayor Bob Sivertsen said one possible tax increase could be raising the sales tax cap. Efforts to raise that in the past have been unsuccessful, following objections from the business community.
The sales tax cap is $1,000. That means any single-purchase item is charged sales tax only on the first $1,000. Sivertsen said the city and borough could consider raising that to $2,000.
“It’s probably one of those low-hanging fruits that would not impact the majority of sales,” he said.
Sivertsen added that the city and borough’s cooperative relations committee could talk about ways to exempt items such as rent and heating fuel.
Also Monday, the council reviewed individual department budgets for the mayor and council, attorney, clerk, manager, finance, IT, fire and police. There were no amendments made during that meeting. Council members can propose amendments any time during the budget process.
Another special budget meeting is set for Thursday, when the council will continue its review of the City of Ketchikan draft spending plan. Once that review is completed, the council will look at the draft Ketchikan Public Utilities budget.
Other city budget meetings are scheduled for Dec. 3rd, 10th, 13th and 17th. The council’s regular meetings on Dec. 6th and 20th could include some budget discussion.
All council meetings start at 7 p.m., and take place in city council chambers at City Hall. Public comment is available at the start of each meeting.
